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In the world of forex trading, there are simply many different approaches and strategies to trade the market. You could trade forex with techniques such as breakout strategy, reversal on a double top and double bottom, trend trading strategy or simply you can use technical indicators to help you identify probable entry positions of trade. Seeing that there are so many different kinds of strategy, have you ever pondered about what winning strategy for forex to use? The fact is this; all you need is just ONE winning strategy to succeed in forex!
Identify entry positions in forex
So, how do you how to spot entry positions in forex? Of course, you’ll need to know how to identify entry positions in forex. You’ll need to have at least some technical knowledge of price action and technical analysis skills in order for you to spot a good trade setup to enter.
More importantly, entry positions are also judged by what is the risk reward amount that you are willing to take. A good entry position will have a feasible TP and SL position that will give a good risk reward.
For example, if a trade setup allows you to set a TP of 150 and a tight SL of 50, the risk reward would be 1:3. Which means if you will the trade, your take profits are 3 times the amount of SL. In such a scenario, it is a good trade setup to enter
Keeping it simple
The foundation to be successful in your trading career be it part-time or a full-time trader is to keep things simple. Do not make your trading complicated but as simplified as possible. It is not necessary for a forex trader to use complicated chartings and indicators to increase his or her winning probability. Instead, all you need to do is to adhere to rules and winning methods that will help you to profit in your trading.
Winning rules and methods
Such rules include using of proper risk reward and risk management strategies. You’ll need to deploy the right lot size per trade. Please take note that liquidating too much equity per trade could jeopardize your trading capital. Another rule to take note is to apply currency correlation in your trade.
It is important that you consider the correlation of currency pairs before placing them in position. If you place multiple positions of highly correlated currency pairs in the same direction, you could risk losing all of the positions if one of the positions went against the trend.
The matter of fact is, there is no fixed winning methods and forex strategy that you everyone can follow. Nonetheless, it is up to you to devise you own methodology by applying the techniques that have helped you to win in your trades consecutively. However, I personally applied price action strategies in my trades. To me, price action trading strategy is one of my winning methods that I use for every trade.
Do not test the market
Most importantly, never ever try to over trade. Many new traders ended up winding up their forex accounts by over trading. They entered the position even if they are unsure. At times there are situations where setups are unclear and it is hard to predict where is the currency pair trending. In situations like this, it is not wise to enter a position. If the trend is not clear, simply stay out of the trade. Do not enter a trade and to risk your position away. Trading in an unclear trend without knowing hen your position is going to trend is simply gambling. It is always good to live and fight another day!
To put this in a nutshell, follow this checklist before you trade
1. Calculate your risk reward before you place your trade. Is the setup worth to enter?
2. Use proper lot size. Apply forex money management.
3. Assess your selected currency pairs with correlation theory before placing them into a trade.
4. Stick to methods that you’ve tried which have a proven track record of winning.
5. Be disciplined and follow these steps for every trade.
6. Have good forex money management practices
All right, hopefully, this article had been helpful to you. Remember, to succeed in forex is to keep things simple!
